vendredi 15 décembre 2017

In a though-provoking post, published on October 26, 2017 on bbntimes.com, Rob Hartnett, Advisory Partner at Miller Heiman, justifies the virtues of proper Key Account Planning. If these virtues have been confirmed by scientific, longitudinal analyses (K. Storbacka, SAMA), evidence often stems from business life and corporate experience themselves. However, it cannot materialize without a conscious collective effort. Under a catchy title, "Key Account Planning is a Waste of Time If...", Hartnett's post implicitly -but briefly - explains why most organizations fail at Key Account Planning which, in turn, only feeds the perception that Key Account Planning by nature is a waste of time.

Six Key Success Factors for a multi-dimensional approach

So, what are the Key Success Factors for Key Account Planning? Addressing this issue first requires a clear definition of Key Account Planning. We see it as both the central task of every Key Account Manager, and one of the dimensions of "Key Account Management", a more encompassing discipline. Our recent article introducing Key Account Planning in a simple, innovative 3x3 dimensional approach was meant to serve as a basis for the current discussion.

Many initiatives can be perceived as Key Success Factors in the development of Key Account Planning. The six winning factors described below necessarily pertain to all levels of the organization, even under the restrictive definition of Key Account Planning given above.

1. Anchorage to the top

The Key Account Managers must feel on a daily basis that they can count on a durable support both from their C-level management and from their Key Account Director. This calls for both internal and external sponsoring.

Internal sponsoring means relentlessly recalling the importance of the Key Account program (through website, newsletter, etc.), mentioning quantitative or qualitative evidence of its success, putting in place an Executive Sponsor program, and organizing internal events such as Key Account conventions and/or awards. It could more simply be organizing specific competitive steering committees for evaluating the investment projects for different key accounts.

Outside sponsoring could lead to significant participation in end-of-year negotiations for example, or setting up an Advisory Committee with a selection of key accounts.

2. Attention given to business quality rather than business quantity

The preeminence of business turnover over profit in our business life is unbelievable! Think about what companies spontaneously announce to show their importance: their market shares! Think about the first criteron on which sales incentives are distributed: turnovers! Yet, developing durable relationships with key accounts will often lead to multi-year investment programs aimed at co-innovation, where value-based pricing will take the lead over cost-plus pricing, sometimes - in the best cases - to a point where the value delivered is so high that the price is no longer an issue.

A business built only on maximizing quantities sold can more easily be copied.

This means that Key Account Managers must focus on differentiated business.

Eventually, it means that their incentive schemes must be more and more aligned with some form of quality or profitability.

3. Openness to training needs

As mentioned above, Key Account Management is very easily ill-perceived (perceived as a direct and short extension of sales, mostly limited to sales people). This means that organizations which want to professionalize their Key Account Management approach must accept the need for training, and training at all levels.

Our experience shows that whenever we are directly invited to train current or potential Key Account Managers, soon comes a time when the organzation' progress requires a training operation (which does not preclue a different training approach) for top management, and even very often a consulting operation on internal reorganization.

Then only can the Key Account orientation show its incredible potential!

4. Customer relationship orchestration rituals

The interaction with key accounts is by nature of the relational type, as opposed to transactional. This means that something mut go on at any time in the relationship, and it is widely known that you have more chances to decipher interesting business when you are not under short term negotiation pressure than otherwise.

It is the Key Account Manager's responsibility to orchestrate this relationship over time. This can be done through multiple types of activities, some internal such as "sales funnel meetings", regular "operating meetings", others external such as business reviews with the customers or a "customer advisory board" (see above).

However, ideally the form of these rituals should be validated by the Key Account Director.

5. Perform and apply Key Account segmentation

All key accounts, although identified as such by your organization, do not necessarily deserve the same amount of resources, because they represent contrasted business potentials. This can be acknowledged from the outset by segmenting the key account porfolio into several segments which will be served with different intensities.

Although it is a rigorous process, segmenting the portfolio per se (i.e. partitioning it) is not difficult. What is much more difficult is defining the rules monitoring the variations in resources and relationship management.

However, when this is properly done, the resource allocation gets aligned with customers' potential, thus leading to more economic performance.

6. Internal competitive process for budget approval

Under strong resource constraints, which is the case of virtually all organizations, the resources requested by all Key Account Managers as a group will surpass the available resources.

In this case, many organizations follow at best arbitrary rules for attributing these budgets and project teams, hence joining our likely "time waster" population.

Others set up "Steering Commitees" at the Global or Regional levels in order to secure objective selection and optimal alignment with corpoate strategy. This in itself is often enough to explain success in Key Account Management.

Already hinted in our preceding article which gave a structured definition of Key Account Management, the Key Success Factors outlined here only confirm, following Hartnett - in a more detailed way - that the Key Account orientation of a firm cannot be seen as a time-looser per se but, rather, the way it is conducted. The problem is, many observers easily make the confusion...!

Permanent Teaching Professor at ESSEC since 1996 after an international corporate Business Development experience, Hubert Faucher helps organizations of all types through training and consulting on numerous aspects of the Customer-Supplier Relationship Development.